As expected, a collection law firm that has been fighting a Civil Investigative Demand from the Consumer Financial Protection Bureau for five years has submitted a petition to the Supreme Court to hear arguments in its case, positing that the funding structure of the agency violates the Appropriations Clause of the Constitution and renders the CID unenforceable.
A copy of the petition in the case of the Law Offices of Crystal Moroney v. Consumer Financial Protection Bureau can be accessed by clicking here.
The petition was filed after the Court of Appeals for the Second Circuit last month upheld a lower court’s ruling that granted the CFPB’s petition to force the law firm — which is no longer in operation — to respond to the CID. In its ruling, the Second Circuit said the CFPB’s funding structure was constitutional, conflicting with a ruling from the Court of Appeals for the Fifth Circuit, which is also now before the Supreme Court.
The “hounding” that the law firm received from the CFPB was a “major” factor in making the decision for the firm to close its doors, according to the petition. The CFPB has purportedly yet to tell the firm or Moroney if either is suspected of violating any federal debt collection law, as well. “It is difficult to imagine that an agency would squander its resources so profligately if it were subject to normal budgetary constraints,” the petitioner wrote.
There is already another CFPB funding case before the Supreme Court. Arguments in that case are likely to be heard during the Supreme Court’s next session, which convenes in October. A decision is expected in a year or so. The petitioner in this case has asked the Supreme Court to hold its petition pending the outcome of Consumer Financial Protection Bureau v. Community Financial Services Assoc. of America,
